3% inflation won't have come as a surprise to the BoE

Ian Kernohan

17 October 2017

Consumer Price Index (CPI) inflation rose to 3.0% in September, on the cusp of letter writing territory. While this is higher than expected in the August Inflation Report, the Bank of England’s (BoE’s) Monetary Policy Committee (MPC) did signal in the last set of minutes that CPI would rise to 3% by October, so this won’t have come as a surprise to them.

We expect the MPC to raise interest rates at the next meeting in November. Inflation should fall back next year, as the effect of sterling devaluation begins to ease.

Consumer Price Index (CPI) inflation rose to 3.0% in September, on the cusp of letter writing territory. While this is higher than expected in the August Inflation Report, the Bank of England’s (BoE’s) Monetary Policy Committee (MPC) did signal in the last set of minutes that CPI would rise to 3% by October, so this won’t have come as a surprise to them.

We expect the MPC to raise interest rates at the next meeting in November. Inflation should fall back next year, as the effect of sterling devaluation begins to ease.

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